- by Philip Campbell, CPA

© Philip Campbell - All Rights Reserved

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The statistics on small business failure are alarming.

Michael Gerber, author of "The E-Myth: Why Most Small Businesses Don't Work and What To Do About It", says that 40% of businesses fail in their first year. 80% fail within their first five years.

THEY RAN OUT OF CASH.

Don't let this happen to you.

Here are 10 Rules to help you take control of your cash flow so you can create business you have always dreamed of.

1. Never Run Out of Cash.

Running out of cash is definition of failure in business. Make commitment to do what it takes so it does not happen to you.

2. Cash Is King

It's important to recognize that cash is what keeps your business alive. Manage it with care and attention it deserves. It's very unforgiving if you don't.

Remember, Cash Is King, because No Cash = No Business.

3. Know Cash Balance Right Now.

What is your cash balance right now? It's absolutely critical that you know exactly what your cash balance is.

Even most intelligent and experienced person will fail if they are making business decisions using inaccurate or incomplete cash balances. That's reason why business failures are not limited to amateurs or people new to business world.

4. Do Today's Work Today.

The key to keeping an accurate cash balance in your accounting system is to do today's work today. When you do this, you will have numbers you need - when you need them.

5. Either You Do Work or Have Someone Else Do It.

Here is a simple rule to follow to make sure you have an accurate cash balance on your books. You do work or have someone else do it.

© Philip Campbell - All Rights Reserved

Cash is lifeblood of every business. Cash is what keeps your business alive. It is a very precious asset that must be treated with care and attention it deserves.

Always remember, Cash Is King, because No Cash = No Business.

One of cold, hard realities of business is that if you ever run out of cash, your business goes down toilet. All your hard work goes right down drain. Your dreams and desires for creating an exciting and profitable business come crashing down.

Stop and ask yourself this question - What is my cash balance right now?

If your answer is "I don't know", then you don't have your cash flow under control. It means you are not "doing today's work today". You are not "doing dishes" each day.

AN ACCURATE CASH BALANCE IS CRITICAL

In business, you have to have good numbers. And most important number of all is your cash balance.

Even most intelligent and experienced person will fail if they are making business decisions using an inaccurate or incomplete cash balance.

Decisions that might otherwise be brilliant become deadly when they are made based on inaccurate data. If you go to doctor and he makes an inaccurate diagnosis, treatment he prescribes for you could be harmful - even fatal.

DOING THE DISHES EVERY DAY

The key to keeping an accurate cash balance in your accounting system is to do today's work today. It's "doing dishes" every day.

The problems start when you, or person you have in charge of your books, violate this rule. When entering cash receipts is put off and entering invoices is delayed.

THE "DISHES" TEST